The Bangko Sentral ng Pilipinas (BSP) announced that it will suspend applications for digital banking licenses starting in September, demonstrating the regulator's cautious approach to the emerging industry.

The policy committee of BSP said that halting applications for new licenses would allow the central bank to assess the performance and impact of these existing digital banks on the banking system, as well as to consider the industry's contribution to financial inclusion.

Regulation needs to ensure that the business environment continues to allow for healthy competition among banks to offer innovative and competitive products to their customers. While the announcement only mentioned a moratorium on receiving applications, BSP Governor Benjamin Diokno said during the briefing that the application window will be closed for at least three years.

Applications submitted before August 31 will remain open for approval. Still, if applicants' documents are missing or do not meet the licensing requirements, the materials will be returned and no subsequent applications will be accepted, according to the BSP.